Disney-Fox Deal: How It Ranks Among Biggest All-Time Media Mergers

At a valuation of $66.1 billion, including assumption of debt, the Disney-Fox combination announced today is certainly a major disruption of the media business status quo. But it is not the richest media deal ever — nor is it a sure thing to work out well, despite all of the blue-skying in some quarters. Looking back on the priciest media deals of the past — and a caveat should be issued here that this is a selective list that omits some telecom or digital deals — the realization dawns that the road to success seldom travels in a straight line.

Where to begin with this catastrophe? Conceived with all of the tie-less boosterism of the first dotcom boom, the massive transaction married the chatroom-and-dial-up might of America Online with the traditional-media foundation of Time Warner. And at the time, Time Warner had many more legacy parts than it does today, with book and magazine publishing, music and a stake in Time Warner Cable.

The collapse of the ISP business — and the bursting of the tech bubble just months after the deal was announced — doomed the deal, as did a complete lack of coordination between the staid tech troops in suburban Virginia and the Burbank-Manhattan set. Things limped along until 2009, when the divorce was finalized with a spinoff. AOL eventually became a division of Verizon, which bought it for $4.2 billion in 2015.

The Department of Justice has sued to block the combination of AT&T’s distribution muscle with Time Warner’s content clout. With the outcome not expected until April at the earliest, media watchers and Wall Street are left to speculate that President Donald Trump’s animus toward CNN jammed up the deal.

Regulators insist the transaction would hurt both consumers and rivals. AT&T execs insist the opposite, pointing to the growth of Internet pay-TV bundle DirecTV Now, which has already hit 1 million subscribers and discounts elements like Time Warner-owned HBO.

Comcast-AT&T Broadband (2001)
$72 billion

The Philadelphia cable company’s deal in 2011 to buy 51% of NBCUniversal for $6.5B (with full control coming in 2013) was a milestone not only in the media game but for regulators still haunted by the 150-plus “behavioral remedies” it imposed. Some have said angst over the approval has driven the government’s lawsuit to block AT&T-Time Warner.

A far bigger and more transformative deal for Comcast was its 2001 purchase of AT&T Broadband (during one of the low moments for the telco, which has been reincarnated multiple times over the past century). The AT&T acquisition gave the combined company 22 million subscribers in 41 states across cable, phone and Internet, and set the template for Comcast’s current cable and broadband portfolio. No AT&T Broadband, no NBCUniversal.

Although, how’s this for a flashback? Comcast CEO Brian Roberts was most excited about a component of the deal that now seems as relevant as CD-ROMs: telephony.

Malone

Associated Press

Charter-Time Warner Cable-Bright House (2016)
$65.5 billion

John Malone, one of the media game’s preeminent dealmakers, pounced on the opportunity to engineer a play for Time Warner Cable once Comcast hit a wall of regulatory interference and abandoned its bid. Charter, of which Malone now owns 27%, also rolled up Southeastern player Bright House to create the No. 2 U.S. cable operator.

Results have so far been positive, though existential questions remain about the role of cable operators in a re-bundling media landscape. One clear beneficiary from the merger, aside from Malone, has been Charter CEO Tom Rutledge. The longtime deputy of James Dolan during his long run at Cablevision made an eye-popping $98.5 million in 2016, more than quadruple his 2015 pay and tops of any American CEO across the board.

Viacom-CBS (2000)
$35.6 billion

The combination of Sumner Redstone’s hard-won studio and cable asset with the Tiffany Network and its media holdings made industry heads spin when it was announced near the peak of the 1990s bull market and just before the rise of digital players.

The companies separated again just seven years later, with then-chairman Redstone insisting that size wasn’t all. Calls for reunification — a scenario recently explored by Shari Redstone — have grown louder lately and will likely resume now that two of its biggest peers have joined forces. At 94 years old, it appears likely that the elder Redstone doesn’t have another mega-deal left in him.